Toward more effective management of information technology benefits

A critical issue facing senior executives is how to improve the return on their information technology (IT) investments. The results of numerous studies are inconclusive as they have failed to show conclusively that IT investments produce expected payoffs. The purpose of this paper is to offer an explanation for the perceived lack of IT payoff and show how managers can improve the return on their IT investments. We argue that IT can provide significant benefits, but in many cases these benefits are not captured by the firm that made the investment. Instead, a large portion of the benefits are reaped by a variety of participants or stakeholders. The implications of this for managers is that they need to view IT payoff as a portfolio of benefits across many stakeholders. They must also understand and manage the distribution of the benefits within the portfolio to assure that benefits are transferred to the bottom line. The paper offers a framework for analyzing the nature and distribution of IT benefits among various stakeholder groups and concludes with a set of guidelines for measuring and managing these benefits.     

A process-focused decision framework for analyzing the business value potential of IT investments

A key consideration during investment decision making is the overall business value potential of an information technology (IT) solution. The complexity of the contemporary IT landscape is increasing. As information systems and technologies become more advanced and interconnected, they often impact multiple business processes in the organization. This in turn increases the complexity of IT investment decisions. This paper describes a decision framework for considering investments in information technologies that impact multiple business processes in the organization. The decision framework is illustrated via a case study of a small business that invested in mobile and wireless computing. The microcosm of the small business serves to illustrate some aspects of the business value derived from information technology investments that are often challenging to isolate in more complex organizational environments. The decision framework can support managers to analyze the overall business value returns arising from the ‘ripple effect’ of an IT investment on core and ancillary business processes. In the decision framework, the business value ripple effect is analyzed via a vertical dimension that emanates from core business processes to ancillary processes, and a horizontal dimension that extends over time.

Effects of time-inconsistent preferences on information technology infrastructure investments with growth options

Increasing information technology (IT) infrastructure spending and the capability of such projects to provide a platform for a firm to realize value from IT marks their importance. Effective management of IT infrastructure investments includes identification of embedded growth options in the infrastructure, and exercising them in a timely manner. Extant research has recognized that while managers could use real options thinking in IT investment management, managerial bias could affect the timing of option exercise and their realized value. We analyze the effect of time-inconsistent preferences of present-biased managers on the exercise time of real growth options and the realized value using a discrete time option valuation model. The results show that present-biased managers are more likely to exercise options early when the net payoffs are low, the option payoffs have high volatility, and the risk free discount rate is small. In addition, present biased managers are more likely to exercise a growth option early in its life when the project is performing well. We provide implications for practice and IT governance.     

Exploring the relationship between information technology investments and firm performance using regression splines analysis

Identifying the business value of information technology (IT) investments has been a major concern of managers and researchers. Various studies have addressed this issue but have provided contradictory results. Here, we explore the relationship between IT investments and firm performance using a relatively new technique, multivariate adaptive regression splines (MARS), and attempt to answer two questions: (1) do investments in IT have a positive impact on organizational productivity? and (2) for a given level of investment, what portion of the total should be invested in IT to maximize organizational productivity? Our results suggest that depending on the conditions that applied, an unbiased observer could either conclude that investments in IT has a positive statistically significant effect on productivity, or that there is a ‘productivity’ paradox. This suggests that the relationship between IT investments and organizational performance is much more complex than that found in some other studies. Our results could also provide guidance to managers who are responsible for determining the allocation of organizational resources.     

Exploring the relationship between information technology investments and firm performance using regression splines analysis

Identifying the business value of information technology (IT) investments has been a major concern of managers and researchers. Various studies have addressed this issue but have provided contradictory results. Here, we explore the relationship between IT investments and firm performance using a relatively new technique, multivariate adaptive regression splines (MARS), and attempt to answer two questions: (1) do investments in IT have a positive impact on organizational productivity? and (2) for a given level of investment, what portion of the total should be invested in IT to maximize organizational productivity? Our results suggest that depending on the conditions that applied, an unbiased observer could either conclude that investments in IT has a positive statistically significant effect on productivity, or that there is a ‘productivity’ paradox. This suggests that the relationship between IT investments and organizational performance is much more complex than that found in some other studies. Our results could also provide guidance to managers who are responsible for determining the allocation of organizational resources.     

Joint collaborative planning as a governance mechanism to strengthen the chain of IT value co-creation

Drawing on the relational view of the firm, this paper examines the chain of IT-based co-creation of value and how joint collaborative planning between partners can strengthen this chain. Using data from 51 suppliers in the telecommunication equipment industry, our analysis demonstrates that the greater the partner-specific IT investments made by the firm, the greater its use of supply chain collaborative systems (SCCSs) with those partners and the greater the firm uses SCCSs with partners, the greater its benefits, through the generation of relational rents. Further investigation also shows that partner-specific IT investments is not a predictor of firm benefits and hence confirms the hypothesized chain of IT-based co-creation where IT investments encourage IT use, which in turn creates business value. Finally, our findings also show that joint collaborative planning between partners is an important governance mechanism, anchored on control and trust, that can strengthen the relationship between SCCSs use and firm benefits by impacting the other sources of relational rents tied to the use of SCCSs. This contribution should give academics and practitioners alike a better understanding of how both SCCSs and joint collaborative planning can foster the co-creation of value.     

The transformational dimension in the realization of business value from information technology

Econometric studies have highlighted factors that appear to explain the differential effects of information technology (IT) on productivity at the firm level. Central to these explanations is the concept of organizational transformation; that value realization from IT depends on time-consuming investments in organizational change and results in new, often intangible, organizational assets. The aim of this study was to further investigate the concept of IT-enabled organizational transformation as a component of the value realized from IT at the firm level. Survey data was analyzed from respondents from 1050 businesses of varying sizes and across industries. Transformational benefits were found to exist as a distinct benefit category and to be closely related to other forms of IT-generated business benefits. They were also an important component of overall IT business value. Qualitative data illustrated these findings and pointed to possible complex causal relationships in the generation of IT value. The findings have implications for models of IT business value generation and for managerial practice.     

Information Technology Investments: Characteristics, Choices, Market Risk and Value

The decisions confronting information technology (IT) managers have changed a great deal since the early 1970s. The key decisions three decades ago were related to the management of application development projects and operations centers. Today, the key decisions are quite different. What level of service should the firm provide end-users? Should IT services, development projects and the ownership and management of operations centers be outsourced? IT investments attempt to satisfy specific needs. Because of environmental differences and differences in the cost structure and benefits of alternative ways in which these needs can be met, the answers to these questions may differ across firms. Modern financial analysis can provide insights to help managers deal with many of the problems they currently face. We use modern financial theory to show how the value of IT investments can be affected by some of the choices made by managers. We show how the market risk of demand and the market risk of costs affect the market risk and value of IT investments. We consider three types of investment decisions: outsourcing versus in-house services; investments in interorganizational systems; and determining the optimal level of IT services that should be provided. Our analysis indicates that: (1) as the market risk of demand for operations decreases, firms are less likely to outsource operations; (2) the value of an investment in an interorganizational system increases as the market risk of costs increases; and (3) the optimal level of user service is inversely related to service demand risk and is directly related to the market risk of service costs.     

A comprehensive investigation on the relationship between information technology investments and firm diversification

This paper empirically investigates the role played by information technology in diversified firms by building a demand function for IT investments. First by reviewing the management literature, we briefly examine different types of diversification, including related diversification, unrelated diversification, and geographic diversification. After carefully developing the theoretical arguments we empirically test the relationship between IT investments and different types of diversification. We find that in general diversified firms demand more investments in information technology, but the positive relationship may also depend on the extent to which firms diversify. Our findings show that firms with diversified structures that increase the complexities of coordination and control, e.g. unrelated diversification or extensive geographic diversification, would face a lesser demand for IT investments because of the increased use of financial controls instead of strategic controls by these firms. Overall, we find that information technology can serve as an effective coordination and control mechanism for moderate levels of diversification whereas non-IT mechanisms for coordination and control becomes more suitable in a context of higher levels of diversification. The implications of these findings for research and practice are discussed.

Cross-credentialing test to begin

A prototype system designed to recognise dissimilar ID credentials presented by visitors to US military and defence industry facilities is to be tested following a contract award to Northrop Grumman Corporation. Alongside the US Defence Department’s Defense Manpower Data Center (DMDC), Northrop Grumman’s Information Technology (IT) and Mission Systems sectors will lead a team developing the Defense Cross-Credentialing Identification System (DCIS).This is a short news story only. Visit www.compseconline.com for the latest computer security news.     

Evolving a pervasive IT infrastructure: a technology integration approach

Over the past five years or so, pervasive computing has emerged as a new computing paradigm with a great deal of appeal. Enterprises are increasingly showing interest in deploying pervasive information technology (IT) infrastructures to realise the perceived benefits offered by this new computing paradigm. However, a return on the investment and considerations of the currently deployed infrastructure is a constraint for businesses to invest in a pervasive IT infrastructure. Realising that the economics of an investment in a new infrastructure can affect the embracing of pervasive IT, we suggest an approach that shows how the existing technology solutions available in the market and deployed in an enterprise can be used to develop a pervasive IT infrastructure, thereby protecting investments and maximising returns. We present an evolution model to systematically and incrementally achieve a pervasive IT environment, and present guidelines for evaluating which services to develop first based on evolving the existing infrastructure point of view. This work provides practical implications for enterprises as well as pointers for research.

Information Systems Offshore Outsourcing: An Exploratory Study of Motivations and Risks in Large Spanish Firms

Prior research has documented that IT investment increases market returns. Economic theories predict such returns to be recognized in accounting profitability; this relationship remains ambiguous in prior literature. We reexamine the relationship between IT investment and firm profitability. Our approach is unique in that we examine complementarities between distinct IT components. We document that a firm’s investments in IT components exhibit different impacts on its profitability conditional on the level of investments in complementary components.     

Customizable landscape visualizations. Implementation,application and testing of a web-based tool

This paper describes a new approach to delivering visualizations of Digital Elevation Model (D.E.M.) data over the World Wide Web. The delivery system described uses state-of-the art Java™ technology to deliver landscape visualizations, in both two (2D) and three (3D) dimensions, that are unique for each user of the service. An example is given of the use of this service as a teaching aid. A “thin client” approach is used to allow the final service to be accessible, both in terms of delivery speeds and user interface, to the maximum number of “non-geospatially aware” users. The landscape server conforms to the OpenGIS® web map server specifications. The service is live at: http://tsunami.geo.ed.ac.uk/∼kwm/landscapes/     

Virtual screening of eighteen million compounds against dengue virus: Combined molecular docking and molecular dynamics simulations study

Dengue virus is a major issue of tropical and sub-tropical regions. Dengue virus has been the cause behind the major alarming epidemics in the history with mass causalities from the decades. Unavailability of on-shelf drugs for the prevention of further proliferation of virus inside the human body results in immense number of deaths each year. This issue necessitates the design of novel anti-dengue drug. The protease enzyme pathway is the critical target for drug design due to its significance in the replication, survival and other cellular activities of dengue virus. Therefore, approximately eighteen million compounds from the ZINC database have been virtually screened against nonstructural protein 3 (NS3). The incremental construction algorithm of Glide docking program has been used with its features high throughput virtual screening (HTVS), standard precision (SP), extra precision (XP) and in combination of Prime module, induced fit docking (IFD) approach has also been applied. Five top-ranked compounds were then selected from the IFD results with better predicted binding energies with the catalytic triad residues (His51, Asp75, and Ser135) that may act as potential inhibitors for the underlying target protease enzyme. The top-ranked compounds ZINC95518765, ZINC44921800, ZINC71917414, ZINC39500661, ZINC36681949 have shown the predicted binding energies of −7.55, −7.36, −8.04, −8.41, −9.18 kcal/mol, respectively, forming binding interactions with three catalytically important amino acids. Top-docking poses of compounds are then used in molecular dynamics (MD) simulations. In computational studies, our proposed compounds confirm promising results against all the four serotypes of dengue virus, strengthening the opportunity of these compounds to work as potential on-shelf drugs against dengue virus. Further experimentation on the proposed compounds can result in development of strong inhibitors.     

Analyzing IT maintenance outsourcing decision from a knowledge management perspective

IT outsourcing is a complex and opaque decision problem. Managers facing a decision about IT outsourcing have difficulty in framing what needs to be thought about further in their discourses. Framing is one of the most crucial steps of human decision making and needs to be assisted to better understand a decision situation. In this research, we examine a number of decision primitives in the context of an IT outsourcing decision situation. We demonstrate how the decision primitives can be employed so that managers can probe deep to better understand a decision situation and to establish a decision basis. In the organizational setting, we exemplify the use of the decision primitives in relation to the perceived outsourcing implications for the managers looking for assistance in accommodating a knowledge management perspective on IT outsourcing. Consequently, we induce insight and a guideline on how to use knowledge management for effective outsourcing in one of the leading financial institutes in Europe.

Reversible Execution and Visualization of Programs with LEONARDO

In this paper we present LEONARDO, an integrated environment for software visualization that allows the user to edit, compile, execute, and animate general-purpose C programs. LEONARDO relies on a logic-based approach to visualization: a mapping between concrete and abstract data structures can be declared through a logic visualization language and animations are conceived as reflecting formal properties of algorithms. LEONARDO is able to automatically detect visual events during the execution of programs and simplifies the creation of visualizations according to an incremental approach. Moreover, it guarantees the complete reversibility of computations, bounded only by the potentiality of the working machine, and appears simple to be used. The latest version of LEONARDO is currently available over the Internet at the URLhttp: //www.dis.uniroma1.it/~demetres/Leonardo/.     

Proactive or reactive IT leaders? A test of two competing hypotheses of IT innovation and environment alignment

When does it benefit a firm to take a lead in innovation with information technology (IT)? How should a firm align its IT innovation with a dynamic industry? In addressing these questions we present a typology of IT Innovation and Environment Alignment (ITIEA) based on a firm's IT innovation strategic orientation and the industry environment. The traditional ‘fit’ perspective predicts that a firm that matches its IT innovation with a dynamic environment would obtain performance benefits. In contrast, the ‘options’ perspective suggests that a firm that takes advantage of a stable environment to proactively pursue IT innovation and develop IT capability as real options would obtain performance advantage. We employ a quasi-experiment design to test these two competing hypotheses using archival data of IT leaders over a time frame of 6 years. We perform a longitudinal analysis of the performance change trajectories of proactive and reactive IT leaders over time. The results indicate a general support for the ‘options’ perspective that proactive IT leaders that lead in innovation with IT in relatively stable environments are found to consistently outperform reactive IT leaders in overall performance, allocative efficiency, and cost efficiency in management process. However, interestingly, the results also show a partial support for the ‘fit’ perspective that reactive IT leaders that emphasize intensive deployment of IT innovation in dynamic environments are found to obtain a cost advantage in production and operation process over time. The findings offer practical implications for managers to better engage in IT innovations to create and sustain competitive advantage. Synthesizing options thinking and dynamic capability perspective, we provide a framework to better understand IT innovation, dynamic environment, and performance outcomes. The findings also shed useful light on whether, when, and how to innovate with IT for sustained competitive advantage.     

guifi.net,a crowdsourced network infrastructure held in common

The expression “crowdsourced computer networks” refers to a network infrastructure built by citizens and organisations who pool their resources and coordinate their efforts to make these networks happen. “Community networks” are a subset of crowdsourced networks that are structured to be open, free, and neutral. In these communities the infrastructure is established by the participants and is managed as a common resource. Many crowdsourcing experiences have flourished in community networks. This paper discusses the case of guifi.net, a success case of a community network daily used by thousands of participants, focusing on its principles and the crowdsourcing processes and tools developed within the community, and the role they play in the ecosystem that is guifi.net; the current status of its implementation; its measurable local impact; and the lessons learned in more than a decade.     

3D urban data to assess local urban regulation influence

Systematically assessing the influence of new urban plans is an important challenge for designing them efficiently. In this paper, we propose a method to assess the influence of local ‘Right to Build’ regulations on constructibility. Our method is based on an optimization algorithm that generates building configurations. This method requires a geographic model that supports the formalization of the Right to Build regulation in order to check if a building respects it. The proposed approach relies on the trans-dimensional simulated annealing optimization method, which produces building configurations composed of a set of parametric objects (boxes in our implementation). Our proposition is released as the SimPLU3D Open-Source project (http://ignf.github.io/simplu3D/). In this paper, we present some tests and results based on this implementation and a use related to the assistance to ‘Right to Build’ designers.     

Communicating IT's Value in a Modern Business Climate

Multidimensional techniques for IT valuation is the bridge between financial IT value management and the strategically aligned application of IT investments. Portfolio management is one such technique, in which managers categorize various project classes. Even with these methods, however, managers must still rely on financial methods that define IT value in economic terms for individual projects in each category